Warm Southern Breeze

"… there is no such thing as nothing."

The cost of everything is going up.

Posted by Warm Southern Breeze on Friday, February 5, 2010

In today’s “Blondie” comic strip, the strip’s protagonist’s husband – Dagwood Bumstead – is seated at the counter of the diner he frequents.

As the owner/cook walks towards Dagwood holding a cup of coffee for him, he announces that, “I had to raise the price of coffee a nickel.

Dagwood responds asking, “Why?”

To which the cook, while drying cups with his apron, replies, “The cost of everything is going up!

Exasperatedly Dagwood exclaims, “Oh, for Pete’s sake, just give me a menu, will you?!

The cook, holding the menu at arms-length says, “Okay, but it’ll cost you a dime.

Inflation – what is it?

Economists – those dreary scientists – tell us inflation is “a general increase in prices and fall in the purchasing value of money.” Off-hand, I would simplify it further, saying inflation is an increase in price – nothing more, nothing less.

Boiled down to its most fundamental part, inflation is one business’s desire for more profit. How much MORE does anyone need?

How much is enough?

Consider, for example, if everything cost $1.00.

Fill your gas tank. $1.00
New tires – $1.00
New house – $1.00
Basketful of Groceries – $1.00
Lawn Care – $1.00
Veterinarian’s Visit – $1.00
Cattle – $1.00
Shovel – $1.00
Coveralls – $1.00
Fire Truck – $1.00
Your Daily Wage – $1.00
Electricity – $1.00
Cell Phone – $1.00

Everybody would make the same amount of money – $30.00 month. Houses would be totally paid-for, etc.

Sure, it’s a fantasy – that is to say, it doesn’t exist in reality – but it COULD! So therefore, it can be used as an example.

At the most fundamental level, inflation (or if you prefer, price inflation, or price increases) result from someone else, somewhere else increasing their profits. Thus, it’s like a wave-in-a-pond effect. It simply travels down the line, eventually dissipating. However, it could be like a wave of the ocean crashing upon the beach!

But for our purposes, the wave-in-a-pond effect will suffice.

Greed accounts for price increases. Somewhere, someone is NOT satisfied with what they have. So, having the power to increase the price of their product, they do so, and send a ripple effect out through the community.

No one lives in isolation.

I like the comment that musician Gil Scot Heron makes about economics. In his song “‘B’ Movie” he comments that, “What has happened, is that in the last 20 years, America has changed from a producer to a consumer. And all consumers know that when a producer names the tune, the consumer has got to dance. That’s the way it is. We used to be a producer – very inflexible at that. And now we are consumers, and finding it difficult to understand.

The cost of everything is going up.

"Blondie," by Dean Young & Denis Lebrun; Friday, 5 February 2010

Lyric excerpt from:
B Movie
(ASCAP title code: 320263354)
by Gil Scott Heron

506 W 145TH ST
NEW YORK, NY, 10031
Tel. (917) 507-0078

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